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Shutting down the government won't stop Obamacare. It might even help it.

Ezra Klein's Wonkbook

Sept. 20,2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

There's a cold logic behind the willingness of some conservatives to risk everything to stop Obamacare. But it's not that Obamacare will fail. After all, if the law will just be a debacle, Republicans should let it take effect, ride the catastrophe to overwhelming victory in the 2014 midterms, and then use their massive congressional majorities to repeal it.

Rather, as EJ Dionne writes, the real fear is that the law will succeed. Once Obamacare begins delivering health insurance to millions of Americans it will become effectively impossible to repeal. That's what's happened in every other country that's introduced a national health-care system. That's why the right needs to stop Obamacare before it begins.

The irony of their strategy, though, is that shutting down the federal government won't stop Obamacare. It might even help it.

The Congressional Research Service put it bluntly -- well, bluntly given the cautious, careful language favored by the CRS -- in a July report. "It appears that substantial ACA implementation might continue during a lapse in annual appropriations," they wrote.

There are a few reasons for this. For one thing, the lapse in appropriations only hits so-called "discretionary" funding. But the ACA's core functions are on the "mandatory" side of the budget. So, for instance, the money for tax credits and Medicaid expansion would arrive on schedule. State and federal exchanges would still operate. The individual mandate would still be in place.

So a lot of the law's funding would be unaffected. Meanwhile, the more marginal spending that is affected could be backfilled by the Obama administration moving mandatory money around, and even going beyond that, the White House could argue that crucial positions fall into the bucket of essential personnel who are protected during a government shutdown. So while it wouldn't be ideal, implementation would move forward.

But it gets worse for Republicans from there.

Obamacare's first year will be full of glitches and hiccups and mistakes and misfires. That's true for every big, complicated law (remember when Boehner called Medicare Part D's implementation "horrendous"?). The expectation is that Republicans will be able to take advantage of those problems. But if the early implementation comes in the context of an extended government shutdown, Republicans might well get blamed for implementation glitches as the media and voters ask whether the law wouldn't work more smoothly if the GOP hadn't turned out the lights.

Moreover, if Republicans get blamed for an annoying and unpopular government shutdown -- not to mention for some of Obamacare's problems -- that might blunt the gains they're likely to make in the 2014 midterms. More Democrats in Congress means more protection for Obamacare going forward.

So a government shutdown won't stop Obamacare from being implemented, but it might mean Republicans get blamed for some of the problems of implementation, and lose the ability to benefit politically from the inevitable hitches in the rollout.

The conservatives who won't yield against Obamacare might ultimately prove to be the law's best friends.

Wonkbook's Number of the Day: $1 billion. That's how much could be spent on Obamacare advertising, both for and against, over the next five years. And some of these ads are pretty weird.

Wonkbook's Graph of the Day: Watch the growth of U.S. income inequality with this animated map.

Wonkbook's Top 5 Stories: 1) Obamacare and health reform ideas; 2) you know what they say about laying economists end-to-end; 3) food stamps cut; 4) YOLO and unilateral immigration reform; and 5) a rare section on criminal-justice policy.

1) Top story: Obamacare's work is unfinished

The two most important numbers in American health care. "The two most important numbers in American health care are 5 and 50. Five percent of people account for about 50 percent of the health system's spending...If you want to cut costs -- and relieve suffering -- you somehow need to help that 5 percent...A common theme, she reports, is that "the health care sector is bearing the brunt of an inadequate social service sector." That's a burden it simply can't bear." Ezra Klein in The Washington Post.

Report: 86,000 deaths a year would be avoided if some states improved their health systems. "There's a nearly fourfold disparity between the best and worst state health systems, according to a new set of rankings from The Commonwealth Fund, a foundation that promotes improved health care for vulnerable and underserved populations. Not only would thousands of premature deaths be prevented, the report found, but if states provided vulnerable populations with the same quality of health care their more-advantaged residents receive, some 33,000 more infants would live to see their first birthday." Niraj Chokshi in The Washington Post.

@daveweigel: If you're a D, gonna get attacked for Obamacare anyway, and subsidies are the only thing that could reverse that, why would you defund?

Pricing glitch affects rollout of online health-insurance exchanges. "Less than two weeks before the launch of insurance marketplaces created by the federal health overhaul, the government's software can't reliably determine how much people need to pay for coverage, according to insurance executives and people familiar with the program...Four people familiar with the development of the software that determines how much people would pay for subsidized coverage on the federally run exchanges said it was still miscalculating prices. Tests on the calculator initially scheduled to begin months ago only started this week at some insurers, according to insurance executives and two people familiar with development efforts." Christopher Weaver, Timothy W. Martin and Jennifer Corbett Dooren in The Wall Street Journal.

WH threatens to veto House GOP bill blocking Obamacare. "The White House issued a veto threat Thursday against the House proposal to keep the government running beyond Sept. 30, which would prevent the government from spending any money to implement portions of the Affordable Care Act." Juliet Eilperin in The Washington Post.

@pourmecoffee: Obamacare passed, SCOTUS upheld, and the president was reelected. Even Adele moved on, GOP.

Obamacare ads are starting to get weird and kind of creepy. "Obamacare's marketplaces open for enrollment less than two weeks from now, and that means we're now seeing a wave of advertisements, aiming to convince people either to buy health coverage-or stay away from it completely. Media tracking firm CMAG expects that, by the time of Affordable Care Act's fifth birthday, more than $1 billion will be spent on health law advertising." Sarah Kliff in The Washington Post.

Supreme Court asked to rule on Obamacare birth control mandate. "The ObamaCare birth-control mandate appears headed to the Supreme Court after two separate cases on the contraception policy were referred Thursday to the justices. The simultaneous appeals were filed by the U.S. government and a Mennonite cabinetmaking company that opposes the mandate that employers include birth control in their employee health plans. The petitions come amid a growing split among circuit courts on the mandate, which requires most employers to cover a range of birth control methods for their workers." Elise Viebeck in The Hill.

@Goldfarb: Obamacare is mainly mandatory spending, but a shutdown would hurt critical roll out efforts

The conservative Obamacare replacement doesn't insure nearly as many people as Obamacare. "H.R. 3121 starts by repealing President Obama's health law and standing up a whole other set of reforms in its place. The component parts are likely to cover fewer people than Obamacare. Perhaps the biggest idea in the RSC plan is to give everyone a standardized tax deduction- $20,000 for families and $7,500 - to help make the purchase of health insurance more affordable." Sarah Kliff in The Washington Post.

@jbarro: "You defund Obamacare." "No YOU defund Obamacare." "No you do it." "No you do it."

Obama, Bill Clinton to tout health care law in New York. "On Tuesday in New York, Obama will attend the Clinton Global Initiative hosted by former president Bill Clinton, where the two will engage in "a conversation about the benefits and future of health care reform in America and access to quality health care around the globe," White House press secretary Jay Carney said." David Nakamura in The Washington Post.

@MikeGrunwald: Hey, if the GOP forces a default, and the global economy implodes, and we're reduced to anarchic dystopia, that would defund Obamacare!

WEIGEL: The GOP's fantasy attempt to defund Obamacare. "If you're in a hurry, and you can only memorize one fact about the coming congressional debt and budget war, try this: There will be no "defunding of Obamacare." It's impossible for Republicans to admit it, great energy is being spent to prevent them from admitting it, and large sums of money are being raised and spent to stop conservatives from realizing it. If you want to skip to the end of this drama, past Friday's likely vote on the resolution that defunds Obamacare, the final page reads "... and Obamacare survived." To get to that ending, House Republicans--who really do want to shred the law--have to construct a series of hallucinations for their holdouts." David Weigel in Slate.

Music recommendations interlude: Arcade Fire, "We Used to Wait."

Top opinion

KLEIN: Summers battle was front in war over Wall Street. "Summers fell because at least five Democrats on the Senate Banking Committee doubted his bona fides as a bank regulator. But even that doesn't get at the whole truth. Summers really fell because those Senate Democrats -- and many other liberals - - don't trust the Barack Obama administration's entire approach to regulating Wall Street. For all the talk of Summers's outsized personality and polarizing past, he really lost because he was a stand-in for Obama." Ezra Klein in Bloomberg.

TYSON: Why job quality matters. "During the recession, employment declined across the board, but 60 percent of the net job losses occurred in middle-income occupations with median hourly wages of $13.84 to $21.13. In contrast, these occupations have accounted for less than a quarter of the net job gains in the recovery, while low-wage occupations with median hourly wages of $7.69 to $13.83 have accounted for more than half of these gains. Over the last year, more than 40 percent of job growth has been in low-paying sectors including retail, leisure/hospitality (hotels and restaurants) and temporary help agencies. Many of these jobs are not only low-wage but also part-time for economic reasons." Laura D'Andrea Tyson in The New York Times.

SPENCE: The blurry frontiers of economic policy. "[E]conomic policies are set at the national level, and, with a few notable exceptions like trade negotiations and the tracking of terrorist funding and money laundering, policymakers set goals with a view to benefiting the domestic economy. And these policies (or policy shifts) are increasingly affecting other economies and the global system, giving rise to what might be called "policy externalities" - that is, consequences that extend outside policymakers' target environment. Of course, such externalities have always existed. But they used to be small. As they grow more significant (the result of greater global connectedness), they inevitably become harder to manage. After all, global optimization would require a global policymaking authority, which we do not have." Michael Spence in Project Syndicate.

LEE: Why your congressman should be making bigger bucks. "Members' salaries have steadily declined in real terms. A member of Congress makes less than 70 percent of what he or she would have made in 1970. And the decline is much more striking in relative terms. Members of Congress today are barely in the top 5 percent of the income distribution...That's a problem. Not because members of Congress "deserve" to be in the top 1 percent of the income spectrum. But because the declining economic fortunes of members of Congress has systematically negative consequences on Congress's performance." Timothy B. Lee in The Washington Post.

SATEL: The tools to prevent another shooting spree. "We will never know his precise motivations, yet it is becoming increasingly clear how Aaron Alexis, who police say shot and killed 12 people at the Navy Yard in Washington this week, fell through some cracks in our mental health system...[P]olice need training in handling mental disturbances. According to the Treatment Advocacy Center in Arlington, Virginia, only 49 percent of the public is served by law enforcement personnel who have received such instruction." Sally Satel in Bloomberg.

Beautiful photography interlude: The 50mm lens.

2) If you laid economists end-to-end, they wouldn't reach a conclusion

Jobless recoveries are here to stay. But economists don't know why. "A major new study from economists at the University of Texas at Austin and the University of California at Berkeley suggests that vintage Europe is the new American normal for recessions and recoveries...In their research, Olivier Coibion of Texas and Yuriy Gorodnichenko and Dmitri Koustas of Berkeley focused on what they describe as "the rising persistence of U.S. unemployment," which is to say, why it's taking so much longer of late for the economy to add back jobs wiped out in a recession." Jim Tankersley in The Washington Post.

The world's leading development economists can't agree on how to tackle inequality. "There's a general sense of fairness involved in arguments that inequality matters - that to function well an economy needs a way for people to get a foothold and progress, or else the whole enterprise folds in on itself as the social contract breaks (think Egypt and Tunisia) or for lack of demand and investment (think the Soviet Union). But between the extremes - between the gouge-the-rich-for-being-rich crowd and the every-nickel-I-earn-is-a-God-given-right set - the hunt for a consensus has proved so thorny that, in crafting a new set of development objectives to replace the Millenium Development Goals, a high-level panel decided to pretty much avoid the issue." Howard Schneider in The Washington Post.

Graphic: Watch the growth of U.S. income inequality with this animated map. Brad Plumer in The Washington Post.

What's causing labor's share to fall? "The decline in the U.S. labor share - now at its lowest level in the post-war period after the Great Recession - has been concentrated in sectors that face increased import competition in the wake of the overall rising role of imports in the U.S. economy, according to a new paper presented today at the Fall 2013 Conference on the Brookings Papers on Economic Activity (BPEA)." The Brookings Institution.

President Obama speaks out on Trade Promotion Authority. "President Barack Obama on Thursday said he hoped to work with Republicans in Congress on a bipartisan bill supporting White House efforts to wrap up huge trade deals with 11 other countries in the Asia-Pacific region and the 28 nations of the European Union. "We're going to need Trade Promotion Authority," Obama said in remarks to the President's Export Council, which brings together top corporate leaders, Cabinet officials and members of Congress to discuss ways to expand trade." Doug Palmer in Politico.

Delay of taper causes mortgage rates to plummet. "The 30-year fixed-rate average slid to 4.5 percent with an average 0.7 point. It was down from 4.57 percent a week ago but up from 3.49 percent a year ago. The 30-year fixed rate reached its highest level since July 2011, 4.58 percent, a month ago. It has remained at or above 4.5 percent the past five weeks." Kathy Orton in The Washington Post.

Jobless claims near six-year low. "The number of U.S. workers filing for initial jobless benefits stayed near a six-year low last week, though continued reporting irregularities make the data difficult to read. In the week ended Sept. 14, 309,000 workers filed unemployment claims, the Labor Department said Thursday. A department analyst said that figure represents a full week of data. However, claims for the prior week, which were revised to 294,000 from an initially reported 292,000, may still be low due to trouble with computer-system conversions in California and Nevada, the analyst said. Both states are still working through a backlog, he said. Outside of the anomaly in the Sept. 7 week, the Sept. 14 level is the lowest since 2007." Eric Morath and Jeffrey Sparshott in The Wall Street Journal.

Existing home sales hit high in August. "Sales of existing homes reached a six-year high in August, rising 1.7 percent from the previous month and more than 13 percent from a year ago, according to industry data released Thursday. The rise in sales, which surprised analysts, shows that increasing mortgage rates did not significantly weaken the housing market, as economists had feared. Instead, buyers rushed to lock in relatively low mortgage rates, contributing to a spike in sales, economists said." Amrita Jayakumar in The Washington Post.

JPMorgan fined $389 million for deceptive credit card practices. "Federal regulators Thursday slapped JPMorgan Chase with $389 million in penalties for deceiving millions of customers into buying costly and unneeded services when they signed up for credit cards...2.1 million consumers were duped into paying for credit monitoring and other add-ons between October 2005 and June 2012. Those consumers enrolled in and paid for identity theft protection products but did not receive the full benefit of the products, according to the Office of the Comptroller of the Currency." Danielle Douglas in The Washington Post.

Websites worth visiting interlude: saddesklunch.com.

3) Food stamps cut

House Republicans just voted to cut food stamps by $39 billion. Here's how. "The House just voted 217 to 210 to approve a GOP bill to cut food-stamp spending by $39 billion over the next ten years. That's roughly a 5 percent cut compared with current law. The bill would spend $725 billion on food stamps over the next ten years, compared with about $760 billion in the Senate farm bill...About half the savings come from new curbs on aid to unemployed, childless adults between the ages of 18 and 50." Brad Plumer in The Washington Post.

Roll call: Who voted for and against the food stamp bill? Ed O'Keefe in The Washington Post.

The economic recovery hasn't reduced food-stamp enrollment. "13.6% of U.S. households received federal Supplemental Nutrition Assistance Program (SNAP) benefits last year, up from 13% in 2011 and only 8.6% in 2008 at the height of the recession. For many here and elsewhere, this is the Recovery That Wasn't...Experts say part of the rise in food stamps results from states expanding eligibility but that much of the past few years' increase is due to extended unemployment...CBO doesn't expect SNAP enrollment to fall below pre-recession levels until 2019." Greg Toppo and Paul Overberg in USA Today.

Will cutting off food stamps put people to work? "The proposal is designed to put more people to work, but it runs up against an unpleasant reality: an unemployment rate of 7.3 percent. Cantor's "get-a-job" message rings hollow when there are few jobs to be had. Many of the people who would be forced off food stamps would simply end up going hungry, say experts at anti-poverty organizations." Peter Coy in Bloomberg Businessweek.

Oh my god this is so great interlude: Putting an engine back together.

4) YOLOing your way to immigration reform

Immigration groups want presidential action. "A slew of immigration rights groups upped the ante on Wednesday, loudly demanding President Barack Obama circumvent Congress and use his executive power to effectively legalize undocumented immigrants on his own...Executive action has lingered as a fallback option for some time if Congress fails to pass immigration reform. But advocates had stayed mostly mum on that option, instead focusing on lobbying Congress on a comprehensive overhaul." Seung Min Kim in Politico.

Bob Goodlatte backs 'earned' citizenship for DREAMers. "A top House Republican in the immigration reform debate on Thursday explicitly endorsed a pathway to citizenship for some undocumented immigrants brought to the United States illegally by their parents. House Judiciary Committee Chairman Bob Goodlatte (R-Va.) said that for the young undocumented immigrants to qualify for this path, they would have to meet certain requirements such as in education or with military service." Seung Min Kim in Politico.

This is the strangest story interlude: "[T]he man's intestinal tract was acting like his own internal brewery."

5) Criminal-justice policy update

Holder directs U.S. attorneys to seek reduced sentences in current, pending drug cases. "Attorney General Eric H. Holder Jr. said Thursday he has directed U.S. attorneys across the country to review and possibly refile charges in ongoing drug cases so that low-level, nonviolent offenders will not face severe mandatory sentences. The policy change will be applied to suspects in drug cases who have been charged but not yet tried, as well as to individuals who have been convicted but not yet sentenced. The directive does not affect offenders already sentenced or serving time in prison." Sari Horwitz in The Washington Post.

Are governments incentivizing longer prison sentences? "A new report finds that states are giving themselves an incentive to keep inmates in prison longer and to crowd those prisoners into smaller spaces, too. The report from In The Public Interest, a transparency watchdog group, finds many state, county and local governments that outsource prisons to private corporations frequently sign contracts that guarantee a certain occupancy rate in prison beds. If governments don't meet those quotas, the contracts require them to pay the firms for unoccupied beds." Reid Wilson in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Everything you need to know about the deficit. Dylan Matthews.

Sorry, Arctic sea ice isn't really 'recovering.' Brad Plumer.

Will coal survive the EPA's new carbon rules? Brad Plumer.

These 5 things need to happen before electric cars really go mainstream. Lydia DePillis.

Watch the growth of U.S. income inequality with this animated map. Brad Plumer.

House Republicans just voted to cut food stamps by $39 billion. Here's how. Brad Plumer.

The conservative Obamacare replacement doesn't insure nearly as many people as Obamacare. Sarah Kliff.

The two most important numbers in American health care. Ezra Klein.

This chart shows why members of Congress really should earn more than $172,000. Timothy B. Lee.

Jobless recoveries are here to stay, economists say, but it's a mystery why. Jim Tankersley.